4 Reasons Baidu Should Divest Its Stake in iQiyi
Baidu (NASDAQ: BIDU), the Chinese tech giant that owns the country's largest online search engine, launched its online video platform iQiyi (NASDAQ: IQ) in 2010.
Baidu spun off iQiyi in an IPO in 2018 but retained a majority stake in the company, which still generated 28% of its total revenue in fiscal 2020. In the past, that relationship was beneficial because iQiyi's stronger revenue growth offset the ongoing declines in Baidu's core advertising business.
Unfortunately, iQiyi's growth gradually fizzled out due to competition from similar platforms like Tencent (OTC: TCEHY) Video and Alibaba's (NYSE: BABA) Youku Tudou, as well as short video platforms like ByteDance's Douyin (known as TikTok overseas) and Kuaishou.
Source Fool.com
